REPORT OF THE
findings and conclusons
San Francisco Public Library
Government tnformatfon Center
San Francisco Public Library
lOOUrkin Street, 5th Floor
San Francisco, CA 94102
Not to be taken from the Library
TABLE OF CONTENTS
The Economic Aspects of San Francisco
as a Port City
Port Maritime Development
Financing Port Maritime Operations
Port Organization and Management
San Francisco Bay Area Port Authority
Members of the Committee and Their
Statement of Approval
Witnesses Testifying before the Committee
3 1223 08678 8438
On March 14, 1972, Mayor Joseph L. Alioto appointed a fifteen member
committee to be chaired by R. Gwin Follis. The Committee was charged
with making recommendations for the long-range development of the
San Francisco Waterfront, including its Port.
The Correnittee held weekly public meetings over several months. Witnesses
representing a wide variety of organizations testified with regard to the
Port and the Waterfront.
As a result of these hearings and numerous Executive Sessions, the Com-
mittee has arrived at the Findings and Conclusions outlined in the
A document containing a summary of the background material and excerpts
of testimony supporting the findings is being published separately. A
limited distribution will be made of the background publication, though
it will be available to all who have a requirement.
The report of Findings and Conclusions is separated into six chapters.
Each chapter deals with a principal area of importance, and all are
arranged so as to provide a sequential pattern of thought development.
Chapters I through III deal principally with the maritime operation
of the Port. Chapter V deals principally with the non-maritime
activity of the Port. Certain conclusions were mentioned in more than
one chapter. This was done for both clarity and emphasis.
The Committee would like to thank the organizations and individuals who
presented testimony. The Committee also is indebted to the Port staff
for its excellent cooperation. The genuine concern for the City and
the future of its Port by all who took part was evident throughout
the Committee's work.
THE ECONOMIC ASPECTS OF SAN FRANCISCO AS A PORT CITY
The Mayor's Port Committee early in its studies recognized the need to
answer a fundamental question concerning the economic aspects of San
Francisco's position as a port city. Specifically, the Committee asked
whether or not maritime port capabilities play a significant role in
supporting the San Francisco economy, and whether the discontinuance
of these capabilities would present serious problems to the City and
to its future.
To this end, a sub-committee was appointed by the Chairman, Mr. Foil is, to
study the economic aspects of the Port and its value to the City. This
sub-committee worked concurrently on this question while participating in
the full Committee's hearings and deliberations.
In the course of arriving at its conclusions, the sub-committee benefited
from extensively researched material already in existence concerning the
San Francisco Port, from information submitted at public hearings by
interested parties and concerned observers, from research and experience
involving other port cities, and from a special research project commissioned
expressly for the purpose of developing additional information on which the
sub-committee could draw in reaching its final conclusions. The latter
project was undertaken by the consulting firm of Gruen, Gruen + Associates,
San Francisco. This report was presented to the full Committee and the
Findings and Conclusions outlined in the following paragraphs were
1. The City of San Francisco cannot afford a decision for abandonment of
maritime port capabilities. Nor can it afford ~ through inattention
or inaction--a general deterioration in the Port's capacity to handle
general cargo shipments, particularly high value general cargo move-
The Committee is impelled to this finding by its assessment of both
the short-term and the long-term consequences that would flow from
such a development. Appreciation of the short-term consequences is
best enhanced by reference to the direct employment and payroll impact
traced to the Port's maritime activities. On the basis of conservative
estimates, which virtually eliminate the possibilities of overstatement,
it can be said that the Port's activities directly provided 20,000 jobs
in 1970; the direct payroll involved in these jobs amounted to at least
Though there may be room for disagreement as to the proportion of
these jobs and income that accrues to San Francisco residents, the
Committee feels that one half is a reasonable estimate. Thus, the
Port directly provides at least 10,000 jobs and an annual payroll of
$122 million to San Francisco residents.
Based on Gruen, Gruen + Associates' research, a conservative estimate
is that an additional 14,000 jobs and an additional annual payroll
of $135 million accrue to San Francisco residents who are involved
in the provision of goods and services to individuals and firms di-
rectly involved in Port activities. Thus, the immediate impact of the
Port activity on the economy of San Francisco conservatively is esti-
mated at 24,000 jobs and $257 million in annual payroll. Clearly,
the elimination of these jobs and their attendant payrolls would
tend to have a multiplier effect on the local economy which would
greatly increase the ultimate erosion of local job opportunities, of
local trade volume, and of the local tax base -- while also tending to
increase the demand for social services that inevitably accompanies
inadequate job opportunities.
In this connection, it is worth noting that many, if not most, of
the jobs involved in the activities of the Port are "blue collar,"
involving heavy minority representation. San Francisco is not pro-
ducing enough of these jobs; and when they are destroyed, new sub-
stitutes are not readily forthcoming. In short, the elimination of
these jobs would present the job holders with severe problems in job
relocation within the City.
2. The second finding, and one that is inextricably related to the first,
is that there is no practical way in which San Francisco can neglect
its Port maritime operations and protect itself against the economic
consequences of job losses, payroll shrinkage and tax base erosion.
This is based on the conviction that San Francisco's shipping volume
is not automatically or even easily transferred to other Bay Area
ports where it conceivably could continue to support the job and
income requirements of San Francisco residents. The fact is, a large
volume of the shipping that moves through San Francisco's Port reflects
the traditionally dominant position of San Francisco as a port city
and the quality of its peripheral support devices -- factors that have
little to do with existing location advantages. Much of this volume
is retained in San Francisco through custom and tradition even though
the competitive thrust of other ports up and down the West Coast
indicates that the cargo could move through those ports quite as easily
and efficiently as through Bay Area ports.
A winding down of San Francisco's Port capability would present all
shippers using San Francisco docks with the requirement for a deci-
sion as to future shipping patterns. Raising this question, in turn,
would lead to a decision in many cases to use West Coast ports other
than Bay Area ports.
San Francisco cannot simply abandon competitive port capability and
expect the business to be retained within the Bay Area. Any attempt
to do so would produce a significant redirection of shipping volume
to West Coast ports other than those in the Bay Area. The consequences
that would flow from such a redirection are spelled out in the finding
presented immediately following.
3. The third finding is that the City's vast network of marine-related
services -- including distribution systems, financial capabilities, legal
processing services, governmental agencies and other general cargo
related businesses — requires for its viability and continued growth a
reasonably strong competitive performance on the part of Bay Area ports
vis-a-vis the other West Coast ports.
By virtue of its economic history and tradition, San Francisco developed
such a complex of trade-oriented services (confined largely to the pri-
vate sector) long before any other West Coast city; it still predominates
in the excellence and comprehensiveness of these peripheral services.
If, however, a considerable redirection of West Coast general cargo trade
should come about as a result of San Francisco's neglect of competitive
port operations—the Committee believes this would be highly likely--
the volume of general cargo moving in and out under the Golden Gate
Bridge would suffer further and more rapid erosion. Under these cir-
cumstances, San Francisco could not avoid entering a period of steady
decline in all those technical and professional services that have
grown up over more than a century to serve the world's marine commerce
The Committee would not wish to quantify the effects of such a decline
in terms of job losses, income losses, etc., in the character and
dynamism of the City over a long period of time. Such an assessment
is out of the area of facts and into the realm of conjecture. The
Committee believes that decisions should be based on the assumption
that a failure on the part of San Francisco to maintain the critical
mass of shipping required for the support and continued growth of
those activities that are Port-related and Port-influenced would have
serious adverse consequences for the future of San Francisco.
4. The fourth finding is contrary to the generally held assumption that
San Francisco's Port has some geographic disadvantage. It was found
that there is no reason to believe that the Port of San Francisco has
geographic, demographic or transportation disadvantages relative to
other Bay Area ports.
Repeated testimony and specific questioning have verified that San
Francisco has advantages vis-a-vis other Bay Area ports.
Rail freight rates from San Francisco to Chicago or New York are iden-
tical to those of Oakland, Richmond, etc. Shipping times are the same.
In fact, the cargo from vessels unloading in San Francisco destined for
the East probably goes on the same train as those of vessels unloading
in other Bay Area ports on the same day.
The Port has three site locations, which collectively cover 183 acres,
now available on the South Waterfront. Sufficient land for new maritime
Port operations and expansion is thus immediately available.
Maritime activities of the Port of San Francisco are vital to the
economy of the City and the entire Bay Area. The Port must there-
fore be developed aggressively on an economically rational basis.
PORT MARITIME DEVELOPMENT
Having concluded that the Port is a major factor in San Francisco's
economic well-being, which must be developed aggressively on an
economically sound basis, the Conmittee presents its recommendations on
how the development should be effected. These are based on the premise
that the Port management, rather than the Committee, should be best
qualified to evaluate specific projects.
Financing future Port developments is reviewed separately in the following
chapter of this report. Also, while an effective marketing capability is
necessary to implement a development program successfully, specific recom-
mendations with respect to organization and management are covered in a
separate chapter (IV).
1. Development of maritime facilities should be considered separately
from non-maritime development.
2. The maritime industry is undergoing constant change in those areas
that impinge on development of Port facilities, i.e., ship size, cargo
handling systems, land area needs, interface with other transportation
3. Sound economic development of the Port depends on its ability to adapt
to future requirements of the maritime industry.
4. The Port's physical characteristics, i.e., frontage, water depth and
backup land, are suitable for development of flexible maritime service
capabilities in new or modernized facilities. The natural water depth
adjacent to the San Francisco Port facilities is greater than at other
Bay Area port locations, a significant competitive advantage in serving
5. The Port historically has undertaken new developments only after long-
term use agreements have been reached with tenants. In order to be
competitive with other areas and other ports in the Bay Area, some
elasticity in this policy is necessary. Specifically, where a need
for a facility is apparent and bona fide interest in such a facility
is evident, some venture development may be necessary to supplement an
aggressive promotion and marketing effort by the Port.
6. The Port has not achieved an effective marketing capability in its
present organizational structure.
7. The policy-making and budget procedures imposed on the Port are
cumbersome, time-consuming and unrealistical ly restrictive, which
make it non-competitive with other ports.
8. Aggressive development of the Port requires, in addition to stepped
up promotional and marketing capability, that the service it provides
and the costs for them be competitive with other ports. In this con-
nection, the following four present Port functions should be assumed
by the City in its established departments:
a. Harbor police
b. Fireboat operation
c. Street maintenance
d. Garbage collection and street cleaning
These activities represent a present cost burden to the Port of
approximately $1,100,000 per year, which other ports do not bear
9. In terms of overall value to the City, the present passenger ship
terminal is inadequate and, while not potentially profitable to the
Port per se, should be upgraded to meet the growing number of cruise
ship passengers using the Port of San Francisco.
1. Management of the Port should continue its present efforts to develop
planned projects in the South Waterfront area. The properties involved
should be prepared for construction concurrently with an aggressive
marketing effort to acquire long-term tenants. While specific needs
of tenants must be taken into account, sufficient flexibility should
be retained to accommodate future requirements where tenants change
or their requirements are altered.
2. The Port n^ist be granted suffici ent management latitude to develop
an effective promotional and marketing capability. The Port management
must then be held responsible for a successful application of this
capabil i ty.
3. If reasonable interest on the part of one or more responsible prospec-
tive tenants is evident for any of the major development projects
under consideration, or if there is a need for a facility on a non-
exclusive, i.e., public-use basis, the Port should move ahead on a
venture basis with phased facility development to anticipate industry
needs, particularly where competitive pressures pose the threat of loss
of large or long-term customers.
4. The Port should review with existing tenants adequacy of present faci-
lities and services for future requirements.
5. The Port should endeavor to maintain in its development program a
varied capability to meet as wide a range of specialized needs, such
as container, LASH, break bulk, RORO and bulk, among others, as are
consistent with sound economic policy.
6. The Mayor and Board of Supervisors should transfer Port responsibility,
and the cost for harbor police, fireboat operation, street maintenance
and street cleaning to appropriate City departments.
7. The Port should provide as economically as feasible a modern, attrac-
tive passenger terminal facility.
FINANCING PORT MARITIME OPERATIONS
This chapter deals with the fundamental issue of how the Port's operations
and development are to be financed and the implications of the policies
In the past the Port's policy has been to operate on a self-sustaining
basis and it has not been a direct burden to the taxpayers of San Francisco
or the State of California. Recognition of changing attitudes toward
public use in areas under Port control may require revision of this policy.
Should this occur, other sources of income should be provided. In addition
to possible subsidy or taxing power, the Port should look to certain
economies of operation in order to become financially sound. Subsidy
of the maritime activities of the Port by income from its non-maritime
properties should not be allowed to lead to poor exploitation of the non-
1. Most capital improvements of the Port have been and can be financed
by general obligation and revenue bonds.
2. The Port never has been a direct burden on the taxpaye>^s of San Francisco.
However, it has benefited from non-maritime revenues t.iat could be
considered a form of subsidy. This support should continue, but not
to such an extent that it would be harmful to other values the
citizens wish to enhance, such as open space and access to the Bay
3. Tax money spent to aid and enchance the Port's operations may be an
excellent investment, one which provides many jobs and direct economic
benefits from an active, vital Port. Thus, should the revenues from
non-maritime Waterfront properties be inadequate to meet justifiable
Port needs, recourse to tax money should be made.
4. The majority of ports on the West Coast operate as relatively autonomous
agencies, largely independent of local government. Some even have in-
dependent taxing powers and most are subsidized through tax revenues,
federal grants, airport revenues or oil royalties. The Port of San
Francisco enjoys none of these.
5. The Port maintains, out of its budgeted funds, certain functions that
other West Coast ports do not. The four functions that should be
transferred out of the Port's budget are fireboat operation, street
maintenance, harbor police and street cleaning. These total approxi-
mately $1 ,100,000 per year.
6. The belt line railroad currently is losing money at a rate of
approximately $500,000 per year.
7. The Port has not received any substantial federal grants, although
efforts are being made to obtain these.
8. The Port's financial management has adhered to the political commitment
to remain in a self-sustaining posture. This policy may not serve the
best long-term interest of San Francisco.
1. The Port can and should continue to finance it's capital improvements.
2. The Port's operations are hamstrung by cumbersome budget procedures.
3. Subsidizing of the Port's operations should be effected if revenues
from both maritime and non-maritime activities are inadequate to
support justifiable Port development.
4. The Port should be more autonomous and either should have a simple
procedure for receiving tax aid in an overall amount designed to meet
the programs and financial needs of the Port or else should be given
limited, independent taxing powers.
5. The City should assume the functions of operating the. fireboat,
repairing streets, providing harbor police and street cleaning
6. Operation of the belt line railroad in the North Waterfront area
should be discontinued. In the South Waterfront an alternative
means to the Port providing the service should be found.
Approval of the Interstate Commerce Commission must be obtained
on the North Waterfront discontinuance. Consent of the U.S. Army,
due to contractual commitments, is also necessary.
7. Federal aid should be sought by the Port on a vigorous, sustained basis.
8. Financial management of the Port should be responsive to a sound business
analysis of the Port's needs in order to assure a vital Port that con-
tributes directly and indirectly to the economy of San Francisco.
Financial management should not be limited to "staying off the tax rolls,"
PORT ORGANIZATION AND MANAGEMENT
The Port of San Francisco is engaged in a highly competitive enterprise.
Its status as a City department imposes restrictions on Port management,
which inhibit its ability to meet successfully the challenges of other
Bay Area and West Coast ports.
The Committee has concluded that the Port's organizational structure must
be more responsive to the needs of its customers if the Port is to succeed
as a competitive entity in its industry.
The Conmittee believes the question of management capability of the
Port lies outside its competence. Testimony presented to the Committee
raised some criticism concerning marketing and promotion activities and
failure to provide the full range of services rendered by competitive
ports. The Committee believes this situation is principally attributable
to organizational weaknesses rather than management deficiency, or in any
event first requires the establishment of a management structure capable
of reacting promptly and effectively to competitive conditions.
1. The principal finding is that t'le Port lacks sufficient management
autonomy to provide facilities and services competitive with those
offered by other ports in the Bay Area and on the West Coast, and
to enable it to capitalize on its natural advantages.
2. The Port Commission enjoys only limited authority in setting policy
and administering Port affairs because of the high degree of control
over Port financial activities exercised by the Mayor and the Board
3. The present procedures for Port budget approval and expenditure of
funds severely hamper efficient management of the Port.
4. Civil Service coverage of top-level management positions limits
flexibility in obtaining superior personnel for these jobs.
5. Other principal West Coast ports enjoy a high degree of management
autonomy, which accounts in large part for the slippage in the
competitive position of the Port of San Francisco.
6. An acceptable compromise between management autonomy of the Port and
financial accountability of the Port to the Mayor and the Board of
Supervisors can be effected. As long as the Port remains financially
sound, generating sufficient income, including use of non-maritime
income, to cover its operating and debt service requirements, the
Mayor and the Board of Supervisors need only provide broad, overall
supervision of the Port.
1. The Port Commission should have ultimate responsibility for development
of long-range facility planning, financing and the development of
maritime and non-maritime properties.
2. The Mayor and the Board of Supervisors should limit their responsibility
to annual program and financial reviews to ascertain whether or not
any supplemental City funds are required for operation of the Port.
If not. Port Commission approval of the Port budget should stand.
3. Because of the highly competitive nature of the Port's principal
activities, the Port Commission should function in a manner similar
to a corporate Board of Directors with similar membership qualifications.
The members should be able to devote the necessary time to this
4. In addition to the Director, the Deputy Port Director, Executive
Assistant and heads of principal departments and bureaus should be
exempt from Civil Service requirements.
5. The management of the Port should have full authority to operate within
approved budget limits in accordance with such control procedures as
may be prescribed by the Port Commission.
Recommendations as to the non-maritime development of Waterfront properties
under control of the San Francisco Port Commission is a most critical issue.
In this chapter we consider the non-maritime portions of the Waterfront
in respect to serving the City and as an attraction to augment the tourist
trade, a major contributor to the economy of the City.
1. Non-maritime development on Port-controlled properties is a responsibility
of the San Francisco Port Commission.
2. The control and development of the non-maritime facilities is a
separate and distinct function from the control and development of
the maritime facilities.
3. The geographical area of non-maritime use is primarily a large portion
of that section of Port-controlled properties north of the Bay Bridge,
extending to, and including. Fisherman's Wharf. Also included are areas
south of the Bay Bridge that have been designated for public use.
4. The amount of revenue from non-maritime activities required to support
maritime functions of the Port is subject to change and thus will
require constant reassessment.
5. There are three classifications of piers north of the Bay Bridge —
those currently serving maritime capabilities, those no longer
serving maritime needs, and those that might be converted to more
effective non-maritime use.
6. The non-maritime development must comply with the existing laws and
commitments and the desires of the public involving balance between
environmental and economic considerations. The existing Bay Conservation
. and Development Commission (BCDC) law prohibits certain non-maritime
development, yet such development may be in the best interests of the
1. Management responsibilities for non-maritime activities should be
separated from maritime responsibilities.
2. Non-maritime property development activities should be undertaken on
a basis of making the most effective economic and publicly beneficial
use of the assets available.
3. The Port should consider making agreements and leases for development
by a non-profit corporation or similar entity permitted under the City
Charter and State Transfer Agreement to undertake the overall develop-
ment of non-maritime properties.
4. Preparation of a Special Area Plan for non-maritime development must
be undertaken and efforts made to conform to, or if necessary,
amend the BCDC law to permit implementation of this plan. This plan
must conform to the City's Master Plan.
5. It should be the goal of the Port Commission to develop its controlled
properties in a manner commensurate with their highest and best use,
achieving a balance between environmental and economic considerations,
including a phased relocation of shipping activities to south of the
SAN FRANCISCO BAY AREA PORT AUTHORITY
The desirability of developing a Bay Area Port Authority was referred to
repeatedly throughout the investigation.
1. The development of a regional port complex capable of providing total
shipping services on an efficient and highly competitive basis is
the key to the future success of all Bay Area ports.
1. The Committee believes the development of such an authority would be
2. The City cannot delay or interrupt the future development of the Port
pending creation of such an authority, and should move promptly and
aggressively to strenghten the Port's competitive position.
The foregoing report, dated January 11, 1973, and consisting of fifteen
pages, is adopted by the undersigned.
THE MAYOR'S PORT COMMITTEE
R. Gwin Foil is
||.| William H. Chester
II William D. Evers
Mortimer Fleishhacker, Jr.
James E. Stretch
Alan C. Furth
Southern Pacific Co.
City Planning Commission
Richard N. Goldman
Leslie C. Peacock
Dr. Cyril C. Herrmann
Arthur D. Lit^^le, Inc.
Cyril I. Magnin
Port of San Francisco
Edward L. Turner
Marine Cooks and
Board of Supervisors
Chamber of Commerce
Witnesses who testified before the Mayor's Port Committee:
Local Joint Executive Board
of Culinary Workers
Curtis J. Baldwin
Telegraph Hill Dwellers
Department of Commerce/
Bay Conservation and Development
Gary I. Campagna
Bay Area Management Co.
International Longshoremen and
Monseignor Matthew Connolly
Apostleship of the Sea
California Stevedore and
Worth B. Fowler
San Francisco Tommorrow
Ships Clerk Union (ILWU #34)
Dr. Cyril Herrmann
Arthur D. Little, Inc.
San Francisco Junior Chamber
Save S.F. Bay Association
Mrs. Amy Meyer
People for Golden Gate National
Telegraph Hill Survival
Western Pacific Railroad
Pacific Far East Lines, Inc.
El liot Schrier
Pacific Coast Iron Shipbuilders
District - Marine Lodge
American Institute of Merchant
Clement E. Shute
Justice Department - Office of Attorney
Appendix B - Witnesses continued
Marine Cooks & Stewards Union
Robert W. Walker
Santa Fe Railway
Sailors Union of the Pacific
San Francisco Port Commission
Edward Laws on
San Francisco Chamber of Commerce
A Special Report - Promotion and
Improvement of the Port of San Francisco
San Francisco Chamber of Commerce
A Plan for Fisherman's Wharf
The San Francisco Port Authority-
Port of San Francisco - An In-depth Study
(Shows why Port is needed in San Francisco)
Arthur D. Little
San Francisco's Mariti-me Future
(Follow-up on September 1966 report on how to
Arthur D. Little
San Francisco Port, . .Asset or Liability?
A SPUR Report
Port of San Francisco Ocean Shipping Handbook
Port of San Francisco
North Waterfront Plan
City Planning Department
South Bayshore Study: A Proposed Development
San Francisco City Planning Department
Proposal for a Passenger Ship Terminal Center
prepared for S.F. Port Commiss ion/U. S . Steel
Skidmore, Owings & Merrill
Report of Waterfront Committee
Committee and Gruen, Gruen & Associates
What to Do About the Waterfront - A Report
to the Citizens Waterfront Committee
Livingston and Blayney, City & Regional
Central Waterfront Public Access Study -
(Bay Bridge to India Basin)
Port of San Francisco
San Francisco Port Needs, Shipping and Area
(10-year capital improvement program)
Port of San Francisco
Resolution No. 70-23/Re Master Plan of Port
Commission on Areas Contiguous to Water
Port of San Francisco
Evaluation of comments and proposals made
concerning the San Francisco Waterfront and
recommendations of possible changes in the
Joint Port and City Planning
Water Front Master Plan
(four chart presentation)
Joint Port and City Planning
San Francisco Bay Plan
San Francisco Bay Conservation & Development
March, 1969 San Francisco Bay-Delta Water Quality
Control Program/ Final Report
State Water Resources Control Board/
The Master Plan of the City and County
of San Francisco
San Francisco City Planning Commission